Reynolds' Delen made $8.65 million in 2012

FILE - This file photo made Oct. 21, 2009, shows Camel cigarettes, a Reynolds American brand, in Philadelphia. Reynolds American Inc.'s third-quarter profit grew nearly 7 percent as higher prices and smokeless tobacco gains helped offset a decline in the number of cigarettes it sold. The nation's second-biggest tobacco company on Tuesday, Oct. 23, 2012 reported net income of $420 million, or 74 cents per share, for the three-month period ended September 30. That's up from $394 million, or 67 cents per share, a year ago. Adjusted earnings were 79 cents per share, matching beating analysts' expectations.(AP Photo/Matt Rourke, File)

In this Sept. 12, 2012, photo, Andrew Neitlich poses in front of one his investment homes in Venice, Fla. Neitlich once worked as a financial analyst picking stocks for a mutual fund. During the dot-com crash 12 years ago, Neitlich didn't sell his stocks, but like many others he is selling now. An analysis by The Associated Press finds that individual investors have pulled at least $380 billion from U.S. stock funds since they started selling in April 2007. (AP Photo/Chris O'Meara)

In this Sept. 12, 2012, photo, Andrew Neitlich poses in front of one his investment homes in Venice, Fla. Neitlich once worked as a financial analyst picking stocks for a mutual fund. During the dot-com crash 12 years ago, Neitlich didn't sell his stocks, but like many others he is selling now. An analysis by The Associated Press finds that individual investors have pulled at least $380 billion from U.S. stock funds since they started selling in April 2007. (AP Photo/Chris O'Meara)

Trader Michael Zicchinolfi, center, works on the floor of the New York Stock Exchange Monday, Oct. 22, 2012. A weak forecast from heavy equipment maker Caterpillar and other poor earnings results weighed on the U.S. stock market in early trading. (AP Photo/Richard Drew)

Trader F. Hill Creekmore, center, works on the floor of the New York Stock Exchange Monday, Oct. 22, 2012. A weak forecast from heavy equipment maker Caterpillar and other poor earnings results weighed on the U.S. stock market in early trading. (AP Photo/Richard Drew)

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RICHMOND, Va. (AP) — Reynolds American Inc., the nation's second-biggest tobacco company, awarded its CEO Daniel M. Delen a compensation package valued at $8.65 million in fiscal 2012, about 2 percent more than the previous year, according to an Associated Press analysis of a regulatory filing.

The pay package came in a year when the maker of Camel and Pall Mall cigarettes, and Kodiak and Grizzly smokeless tobacco saw its profit fall 10 percent to $1.27 billion and its revenue excluding excise taxes decline 3 percent to $8.3 billion. Cigarette volumes fell more than 5 percent to 68.9 billion cigarettes and its U.S. retail share fell 1.1 percentage points to 26.5 percent of the market. The company, based in Winston-Salem, N.C., said smokeless tobacco volumes grew 8 percent and it claimed 32.4 percent of the U.S. retail market.

The compensation deal was disclosed in the company's annual proxy filing with the Securities and Exchange Commission on Friday.

Delen received a base salary of $1 million and a $1.2 million performance-based bonus. He also received stock awards valued at about $6.2 million and other compensation worth $203,312.

The 47-year-old, who has served as CEO since March 2011, received $8.5 million in 2011.

Reynolds American will hold its annual meeting May 9 at its headquarters, where shareholders vote to re-elect four directors to its board and vote on a shareholder proposal to declassify the board.

The Associated Press formula calculates an executive's total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest that the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.

The value that a company assigned to an executive's stock and option awards for 2012 was the present value of what the company expected the awards to be worth to the executive over time. Companies use one of several formulas to calculate that value. However, the number is just an estimate, and what an executive ultimately receives will depend on the performance of the company's stock in the years after the awards are granted. Most stock compensation programs require an executive to wait a specified amount of time to receive shares or exercise options.

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Michael Felberbaum can be reached at http://www.twitter.com/MLFelberbaum.